Is the Affordable Care Act and Medicare a good marriage?

By David Shields

WealthMark Advisors, Inc

On the surface, the Supreme Court’s upholding of the Affordable Care Act doesn’t seem like it would largely impact seniors, as the point is to provide affordable health care for all. Besides, seniors already are insured, right? However, the legislation’s domino effect could impact Medicare.

Half a trillion dollars in Obama Medicare cuts over the next decade could mean an added financial burden for enrollees. These cuts don’t take into account the volume of enrollees and, as a result, health care providers could receive less funding from the Medicare program, potentially crippling their operations financially. Payments to the Medicare Advantage program will decrease by $150 billion over the next decade. These Obama Medicare cuts could mean a scaling back in services and, in some cases, cause providers to pull out altogether, especially in rural areas.

Medicare Advantage enrollees could lose on average more than $3,700 in services within the next five years, and more than 7 percent of beneficiaries could be forced into other options.

Other considerations:

The Independent Payment Advisory Board, established under the plan, can cut even more Medicare payments unless an un-vetoed majority of Congress steps in.

Changes under the plan could potentially force enrollees to receive their services from Accountable Care Organizations, essentially government-supported HMOs run by doctors and hospitals, not insurers.

Free preventative care services for qualified enrollees will mean higher premiums, not large savings, as intended. In addition, if lobbyists enter the picture, more and more services could be added to the list of these preventative care services.

Obamacare aims to close the “donut hole” of Medicare Part D, the part that provides drug coverage. This gap in coverage occurs after beneficiaries have maxed out their initial $2,930 in coverage (after deductible). The benefit kicks in again after drug cost reaches $6,657. Part of President Obama’s solution to address the gap is to gradually raise the $2,930 limit, another Medicare impact to the tune of $25 billion within 10 years, according to the Congressional Budget Office.